If you’ve set your heart on upsizing, it’s essential to put some basics in place. You should be clear not only on the goals you wish to achieve by upsizing to a larger home, but also the amount of money you can spend to do it.
Upsizing is more than just moving to a larger property. You need to be clear on whether you want extra living space, or more bedrooms to accommodate a growing family or a larger garden with a pool and entertaining area. If you go into a purchase without this clarity, you can risk making an expensive mistake.
The constraining factor, of course, is finance. You should work with your bank or mortgage broker to set a spending limit. This way, you’ll avoid wasting weekends looking at homes beyond your reach and limit your search to properties you can afford.
Here is a quick list of actions to take as you consider upsizing.
- What equity do you have in your existing property? – This will be a critical factor in determining your level of borrowing to upsize. A quick call to your bank or lender will give you the latest total that you owe on your mortgage and your options about getting a larger loan.
- How much is your current home worth? – It’s a great idea to ask a local real estate agent to appraise your current property as a first step to upsizing. It will give you a good idea of the price your home might achieve and discuss homes that are on the market and suitable for your needs. We’d be happy to help.
- Calculate your spending limit – Work with your lender, or mortgage broker, to set your spending limit. It’s a good idea to have your bank commit in writing to the total loan it will provide, as this will help you to organise your finances in the event you need to move quickly to beat rival buyers or bidders.
- Do you have the ‘extras’ covered? – You’ll need to factor in stamp duty, inspections and legal fees, a possible bridging loan and increased insurance costs for a larger home.
- Can your cash flow take the hit? – Don’t underestimate the additional cost of owning a larger house. You’ll be paying more taxes and rates, as well as facing larger utility bills, plus the costs of managing new features like pools or gardens. If all that’s manageable, you’re golden.
- Is renovation a better path? – That’s always a possibility. But it’s a rare project that stays on budget and doesn’t stress-out the owners. There are pros and cons to both, of course but when you buy a new home, you’ll know your costs in advance. That’s not true if you renovate, where the list of unknowns can be extensive.
If you’d like to take the first step towards upsizing, contact us for a free property appraisal. We’ll help you understand how prices are performing in the current market, help you work on a plan to ready your home for sale and give you an understanding of what your home might be worth in the current market.